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3 years ago

The money multiplier equals:________.

Business

2 answers:

Serjik [45]3 years ago

8 0

Answer: B. 1/R, where R represents the reserve ratio for all banks in the economy.

Explanation:

The Money Multiplier is the money that Banks generate given a certain RESERVE REQUIREMENT/RATIO.

A Reserve Requirement is money that the Central Bank requires that Banks do not loan out and instead keep in reserve.

For example, if the reserve rate is 10% and a bank has $10 they can only loan out $9.

Assuming they loan out $9 then they created $19 in the economy because their customers still own the original $10 but now they have also given loans of $9. The people who take the loans then deposit it in another bank. That bank would keep $0.90 in reserve and loan out $8.10 meaning that $27.10 now exists in the economy.

The process goes on and on until it gets to $100.

A simpler way to get to the final figure is to divide 1 by the reserve requirement = 1/r which is the money multiplier.

Using the above example, that would be 1/0.1 which is 10.

Multiplying this 10 by the initial deposit of $10 will give you that same $100.

nordsb [41]3 years ago

5 0

Answer:

B. 1/R, where R represents the reserve ratio for all banks in the economy.

Explanation:

Money multiplier is a term used to relate the maximum amount of commercial bank money that can be created, given a certain amount of central bank money.

Money multiplier simply tells you about the maximum amount of money supply that could be increased based on an increase in reserves within the banking system.

By simple terms,

The formula for the money multiplier = 1/r

where, r = the reserve ratio.

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Lana71 [14]

Answer:

a. Cash payment (or an obligation to pay cash) occurs before the expense recognition.

Explanation:

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The correct answer is alternative a. Cash payment (or an obligation to pay cash) occurs before the expense recognition.

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4 years ago

Weatherly Company reported the following results for the year ended December 31, 2016, its first year of operations: Income (per

disa [49]

Answer:

Deferred tax asset = $402,500

Explanation:

given data

Income before income taxes = $3,300,000

Taxable income= $4,450,000

tax rates 2016 = 35%

tax rates 2017 = 30%

solution

first we will take here difference between Income before income taxes and Taxable income that is

= Taxable income - Income before income taxes

= $4,450,000 - $3,300,000

= $1,150,000

we can say now taxable income is the higher income than income before income tax

so we get here Deferred tax asset that is

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4 years ago

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ohaa [14]

Answer:

PV = $18,265.6

Explanation:

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3 years ago

The Cutting Department of Cassel Company has the following production and cost data for July. Production Costs 1. Transferred ou

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Answer:

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Please find attached solution to the above question.

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3 years ago

In consumer finance, which of the following are primarily used? A. financial statements B. budgets C. both budgets and financial

Nady [450]

Answer:

Explanation:

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2 years ago